Envestnet, Inc. (NYSE:ENV) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It was a pretty bad result overall; while revenues were in line with expectations at US$1.2b, statutory losses exploded to US$4.38 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Envestnet's eight analysts is for revenues of US$1.35b in 2024. This would reflect a notable 8.5% increase on its revenue over the past 12 months. Earnings are expected to improve, with Envestnet forecast to report a statutory profit of US$0.60 per share. In the lead-up to this report, the analysts had been modelling revenues of US$1.37b and earnings per share (EPS) of US$0.72 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at US$56.63, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Envestnet at US$79.00 per share, while the most bearish prices it at US$45.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Envestnet'shistorical trends, as the 8.5% annualised revenue growth to the end of 2024 is roughly in line with the 9.5% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 12% annually. So although Envestnet is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Envestnet's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$56.63, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Envestnet going out to 2026, and you can see them free on our platform here.
It might also be worth considering whether Envestnet's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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